Supplier meetings in medium-sized industrial companies - preparation and implementation
published on
12.11.2024
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Your checklist for successful negotiations with suppliers in medium-sized industrial companies. If you want to hold your own against well-trained sales professionals, you have to draw them out: Remain sovereign with all figures, data & facts about the business relationship and fend off specious arguments with detailed knowledge about the supplier. With Tacto's checklist, you have a solid basic framework for your next negotiation in hand.
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A solid database gives you the right arguments
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Understand your supplier and the initial situation
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Define quantifiable goals
How much do I buy from a supplier? How have prices developed since the last conversation and how many complaints have there been in the meantime?
These are all questions that you can clarify before the supplier meeting and are essential for a target-oriented negotiation. In addition to the development of the purchase price, the main focus here should be on the security of supply by the supplier and the quality of the delivered product.
In many cases, a good data basis provides the basic framework for keeping the upper hand in the subsequent price poker. Especially for mid-cap companies, Excel is the instrument of choice for the analytical preparation of delivery dates and the preparation of historical delivery data. It should be noted that manual evaluations carried out by the user can lead to an incomplete or incorrect data basis. It is not uncommon for errors to creep in when entering the formulas or for the exported data to be incomplete. Both lead to the later evaluation being distorted and incorrect conclusions being drawn.
In addition to Excel, there are now other e-procurement solutions that contribute to a far more precise data evaluation. Some software solutions are easy to use and carry out the analyses automatically in order to visualise and display them in the procurement cockpit.
Analytics with Tacto
With Tacto's software solution, procurement departments of medium-sized companies can prepare for supplier meetings quickly and cost-effectively. At the push of a button, the buyer can access all relevant data in the procurement cockpit, track price developments and supply flows and do so without the use of large IT resources.
Learn more about Tacto
Only if you know your supplier, his market shares, upstream suppliers and costs as well as his current financial situation in detail, will you understand the starting situation with which your dialogue partner enters the negotiation. This forms the basis for you to be able to adjust to his argumentation in a targeted manner.
Especially in a tense market situation, with rising prices and impending supply bottlenecks, addressing the supplier's position can save a lot of money: Not all price increases at every level are justified - many sellers use tense market situations to increase profits.
With simple business calculation methods, such as a price structure analysis, the supplier's prices can be at least partially broken down and decomposed into the cost structure. Especially if the supplier is located close to the raw material, the current market prices are easier to understand and the calculation gains in accuracy.
Supplier relationships are usually designed to last for years or even decades. Over the years, there are usually several direct and indirect points of contact with a supplier. A lot can be found out about a supplier through trade fairs, competitors or industry contacts. Who makes the decisions in the company? How much negotiating power does the responsible salesperson bring to the supplier meeting and so on...?
Here it is worthwhile to record the information gathered over the years in detail and to take a look at the documents before the interview: Perhaps your counterpart does not have as much decision-making power in the company as he claims?
Goals can only be achieved if they are defined in advance. It takes years of experience and dexterity to define the right goals for the respective negotiating position. You can formulate your personal goals for a supplier meeting in an ambitious way. However, the achievability should be kept in mind: The maxime for setting goals is: "high, but realistically justifiable".
In essence, the goal is to formulate valid and easily measurable objectives that can be brought into the discussion based on their research and analysis.
Possible goals could be, for example:
Especially if the negotiation is expected to be tough, it makes sense to set higher and measurable goals than you can achieve before the interview.
The reason is simple and anchored in human psychology: if your conversation partner repeatedly rejects your wishes, he or she will most likely feel obliged to say "yes" at some point. In a conversation, you can always assume that your interlocutor is just as interested in a joint solution as you are. The bottom line is that such talks should lead to a win-win situation. The ultimate goal for all your negotiations should always be long-term partnerships with suppliers.
We have compiled further questions and general assistance for preparing your next supplier meeting in a comprehensive checklist.
